We laid out the changes and some of the stats behind them while checking in with our Chief Product Officer, Jens Hartwig.
But first, what’s actually changed?
Previously we had two products: Core & Pro.
Core is a theft-only product (with a few little extras like legal assistance) aimed at riders needing some essential theft cover. Our Core cover hasn’t changed.
Pro was a really advanced cover that had everything. Damage, racing international travel - the broadest range of coverage possible.
Now, we’re introducing Laka Complete, which sits in the middle. It includes theft, damage, and roadside assistance, but international travel and licensed racing are removed.
Laka Complete is all about giving you the complete day-to-day cover that you need and cutting out what (the vast majority of) you don't use daily.
You typically don’t need the worldwide travel and racing parts of the cover 365 days a year. Licensed racing is usually seasonal, and travelling is also usually for short periods.
So we’ve introduced an ‘Add-On’ that means you can activate our Worldwide Travel & Licensed Racing, for a minimum of 30 days, when you need it.
What’s the deal with racing?
When deciding where to place racing, we opted to move “Licensed Racing” into the add-on while keeping non-licensed events in our Complete package.
This means events that don’t meet our criteria - like gravel events & sportives (see the details here) - can be included in Laka Complete.
The reason for splitting racing events like this is that we found certain types of races are much more likely to lead to accidents and we are taking this into account in our pricing for Complete and the Travel & Racing Add-On.
Accurate pricing based on how The Collective rides
The other change is introducing smarter pricing that takes into account who you are as a cyclist and the types of riding you do.
So whether you’re getting into cycling for fitness, riding to compete, or taking your kids to school on your cargo bike, we want to make sure every member of The Collective contributes their fair share based on their riding.
Of course, the price customers pay for the insurance is attached to the bike value, but now it’s more differentiated by the types of bikes you own and where you live. Each bike you have insured is dynamically priced based on the cover you have chosen. A good example of this is, that your £1,000 commuter bike doesn’t increase the cost of our Worldwide Travel & Licensed Racing add-on because you’d typically use your £2,000 road bike to compete and travel.
The numbers behind it all
We don’t make these changes without some serious number crunching beforehand.
Over the last 8 years, we’ve gathered a whole lot of info on cycling behaviours and insurance! Here are some of the stats we used to help make these product rollout decisions:
- In a typical summer month race and travel claims represent around half of damage claim costs
- Worldwide travel claims across the year represent 17% of damage claim costs
Crucially, we found that 30% of riders leaving Laka are because they only needed short-term cover. This is important because super short-term cover, whether that’s for a specific journey or ride, has a negative impact on costs for The Collective as a whole. We’re here for flexible cover but not at the expense of The Collective.
In a survey of our members, we asked The Collective to share their ‘must-have’ cover modules. Here’s how they ranked:
- Theft
- Accidental damage
- Third-Party Loss
- Worldwide Travel
- Racing & Events
- Emergency Cash
- Legal
Using this data helps us understand how The Collective rides, whether they travel, race and gives us an indication of what cover modules are purchased together. What we understood was that riders who race, often travel and vice versa!
What’s up next?
And we don’t plan to stop with the smarter insurance cover there. Here’s what’s on Jens’ mind when it comes to taking Laka insurance to the next step:
1. Giving more granular control over what you need, when you need it
“This includes splitting out Licensed Racing + Worldwide Travel cover. As mentioned, at the moment these two are bundled together in our add-on because of what we noticed in rider behaviour. However, in the future, we’re planning to split these up so that we can offer more flexibility.
We’re also thinking about the concept of a race pass. So you could say I want to buy a race pass for this particular bike. That's all about personalising the cover so you have the most accurate price for each bike. This means we’re not assuming that you race with your high-end titanium bike in the next crit race. Again it’s all about making sure our cover has enough flexibility and personalisation that takes into account how people ride.”
2. Smarter Tracking
“We are seeing a lot of exciting developments in the EU on the smart tracking and connectivity e-bikes. Manufacturers, retailers and service providers are working together to recover, repair or upcycle stolen bikes. We are spearheading these initiatives with other leaders in the industry and will be bringing these kinds of services to the UK. As a result, our riders in higher-risk areas will benefit from lower cost of insurance and fewer hours off their bikes.
And I think that’s really exciting. It means we can bring down the cost for our riders where otherwise the insurance cost would have been prohibitively high. E-bikes are the natural fit with integrated connectivity, but we also hope to establish these technologies in your typical pedal bike.
A belief in better...
Hopefully, you can see that the changes we made have you, the rider in mind and this is the first of many changes that are all about offering you the cover you need when you need it. At Laka, our north star is a belief in better. A better way of doing insurance that doesn’t line the pockets of faceless companies but literally supports riders and charges a fair fee to deliver the service. We have always been (and will always be) about doing insurance differently - we are excited for the future so come along for the ride and let us know how we can serve your needs better!
